New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

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refusal to credit annual tax abatement - recourses?May 13, 2021

I will start afresh. If a coop or condo refuses to give eligible units their credits or unilaterally
decides to postpone them for 6 months or more beyond the legally required date, what resources
does an apartment owner have?
Small Claims court? If anyone has an idea it is most welcome. Thank you.

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missing tax abatement - PhilC May 14, 2021

When you say co-op or condo... which is it?

For a co-op, maybe you should point them to this:

https://www.nysenate.gov/legislation/laws/RPT/467-A 6:

6. The commissioner of finance may impose, after notice and an opportunity to be heard, civil penalties on each member of a cooperative board of directors of no more than ten thousand dollars for the willful failure to credit fully any tax abatement granted pursuant to this section to eligible dwelling units.

Also, you might find it helpful to obtain the relevant renewal and change and tax benefit letters to see what is going on. You can do this with a FOIL request:

https://a860-openrecords.nyc.gov/

This is explicitly permitted/available under 467-A 8. Once you have the tax benefit letter, you can always just show up with it at the next annual meeting.

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> Join the conversation Comments (1)
Missing Tax Abatement - Steven424 May 14, 2021

Hi Phil -

Thank you for posting this. When DM first mentioned a deadline I had never heard of any civil penalties enabled in the legislation. This clears it up nicely.

Unfortunately, this particular section of 467-A is silent on how long a period of time must transpire before non-action by the board is considered "willful failure to credit fully any tax abatement." You wouldn't happen to know if a time limit is called out anywhere in this or other legislation?

Thanks!
--- Steve

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Thanks Phil and Steve. Great info. - DM May 16, 2021

No coop or condo board has the legal authority to delay the credit of the abatement to eligible units past the required time.
It is bad enough that it has become routine to commonly assessed for the abatement as the idea was to equalized taxes for unit owners.

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EQUALIZE THE TAX - Grant May 16, 2021

I believe if you take a second look at the simple math, the abatement does equalize taxes with single family homes compared to co-op's. The state giving money back to a building does defray the cost of projects compared to asking shareholders to dig into their pockets, which is what they would have to do if the abatement wasn't eventually directed at paying for building costs.

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Tax abatement - Carl Tait Jun 16, 2021

In most coops, you don't actually net any money from the abatement. It's typically flattened with an offsetting assessment in the same billing cycle. The abatement is "vapor money" that results in a reduced tax bill for the building, not actual cash that the coop is given to disburse.

That said, it is of course obligatory for coops to credit the abatement as a line item in your billing, even when it is immediately offset by a corresponding assessment. But it's not a hidden pot of gold that's being withheld; it's an accounting issue. It should definitely be credited/assessed within the fiscal year to ensure the accuracy of your annual financial report.

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